● Covered by 1 source · 1 reportMedium impact1 negative
Qualcomm anticipates faster decline in Apple revenue due to supply constraints
Key points
- Qualcomm's Apple revenue will decline faster than expected.
- Supply constraints reduce Qualcomm's iPhone component share below 20%.
- Qualcomm aims for $5 billion in data center revenue by 2027.
- Patent licensing agreement with Apple continues until March 2027.
Accelerated Revenue Decline from Apple
Qualcomm's CEO, Cristiano Amon, stated that the company anticipates a quicker decline in revenue generated from Apple products. This accelerated reduction is expected to begin in the fourth quarter of the current fiscal year.
The primary reason cited for this faster decline is ongoing supply constraints. These constraints are projected to reduce Qualcomm's share of components used in the upcoming iPhone launch to well below its earlier estimate of 20%.
Diversification Beyond Smartphones
In response to the anticipated loss of Apple's modem business, Qualcomm has been diversifying its operations beyond the smartphone market. The company is focusing on other segments, particularly its data center division.
Qualcomm projects its data center division to generate $5 billion in revenue by fiscal year 2027, aiming to offset the decreasing revenue from Apple.
Apple's Internal Modem Development
Apple has been working to develop its own modem components, following its 2019 acquisition of Intel's smartphone modem business. This initiative aims to reduce Apple's reliance on external suppliers like Qualcomm for modem technology.
Despite the reduction in component sales, Qualcomm's patent-licensing royalties from Apple are separate from chip sales and are expected to continue. The current licensing agreement, extended by two years, remains in effect until March 2027.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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Reporting from
Qualcomm expects its revenue from Apple products to decrease more rapidly than previously projected, starting in the fourth quarter, due to ongoing supply constraints. This accelerated decline is attributed to supply issues reducing Qualcomm's share of components in the next iPhone launch to below 20%, impacting its financial outlook.